Responding to a question on CNBC Awaaz from a viewer who had bought Cochin Shipyard shares at ₹2,700 apiece, Srivastava said this is another example of a “good stock at a bad time”.
Cochin Shipyard shares had surged nearly 6 times to hit their record levels of ₹2,979 in July before correcting to their current levels of just over ₹1,800.
“If you are a late entrant in such businesses, you will face some time pressure,” Srivastava said, adding that there looks to be some further pain for Cochin Shipyard stock.
“There is still a bit more pain left, say another ₹150 downside,” Srivastava added.
He also warned that it would not make much sense to exit at those prices and that positions can be reviewed once stocks recover. He also suggests giving a time horizon of one to three months before making a decision on positions.
Cochin Shipyard shares trade with gains at today’s session after the Defence Acquisition Council approved capital procurement proposals worth ₹1.45 lakh crore, which also include next-generation fast patrol vehicles, something that Indian shipbuilders including Cochin Shipyard manufacture.
Cochin Shipyard shares hit an all-time high of ₹2,979 in July before staging a strong recovery to higher levels. The stock is currently down 35% from its all-time high levels.
Despite a 35% drop from its peak, Cochin Shipyard is trading at a one-year forward price-earnings multiple of 41.6 times, which is well above its five-year average of 14 times.
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